AIA cuts ties with Sovereign

AIA has dumped an agency agreement with Sovereign’s Caledonian Financial Services after becoming concerned that its products would be sold through Sovereign’s new allfinanz brand.

AIA general manager David Whyte says the decision to drop the agency agreement follows a recent meeting between Sovereign management and Colonial franchisees.

Sovereign and Colonial were competitors when the agency agreement was set up. Since then Sovereign has been bought by Commonwealth Bank of Australia owned ASB Bank, which subsequently bought Colonial.

Whyte says he understands the meeting discussed using the Caledonian agreement to provide access to AIA’s products through the allfinanz brand. The allfinanz group is the name for the relaunched Colonial franchise channel.

Whyte says there was also talk at the meeting of central sourcing, where life companies arrange to provide the products of other life companies to their own agents, a practice AIA does not support because of the control it gives life companies over agents’ commissions and business flows.

"We know nothing about allfinanz, and the suggestions regarding central sourcing are inconsistent with our commitment to advisers in the market", he says.

"On review of the Caledonian agency, we concluded that it was no longer appropriate to maintain the relationship, and notice of termination has been delivered."

Any adviser wanting to access AIA directly is welcome to contact the company, he says.

Sovereign was not available for comment last night.

Whyte says Sovereign had never approached him about using the Caledonian agreement to give Colonial franchisees access to AIA’s products.

He says the insurer is trying to impose new terms on Colonial franchisees following the introduction of allfinanz.

It is important advisers know they can deal directly with AIA, he says.

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